NY cocoa may rise into $2,682-$2,821 range in Q1

SINGAPORE: New York cocoa may rise into a range of $2,682-$2,821 per tonne this quarter, driven by a wave C.

This wave started at $2,092. It consists of three smaller waves. The third wave labelled c is expected to be equal to the wave a, to travel into the $2,821-$2,993 range.

A realistic target zone is from $2,682 to $2,821. A trendline falling from $3,775 points at $2,993. The wave C looks incomplete. It is still developing within a rising wedge.

The upper trendline of the pattern suggests a target similar to $2,993.

Right now, it is still too early to decide the nature of the wedge, which looks like a bullish pattern, based on the wave analysis.

Given that cocoa failed twice to break $2,821, chances are it may overcome this barrier in its third attempt, if it could approach this level again.

Support is at $2,370, a break below which could signal a continuation of the downtrend from the February 2020 high of $2,935.

On the daily chart, the pattern from the Nov. 8, 2021 low of $2,433 looks like an inverted head-and-shoulders, which suggests a target of $2,825.

The pattern will be confirmed when cocoa breaks the neckline resistance of $2,597.

A break below $2,440 could cause a fall into $2,268-$2,374 range.

Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.